EC “in a muddle” over single market rules

A telecoms consultancy has identified what it says are discrepancies in the European Commission’s plans to create a single European telecoms market, lending credence to fears voiced by EU mobile operators.

Stefan Zehle, CEO of Coleago Consulting, believes the part of the Commission dealing with competition is out of step with the part that works on telecoms, putting the authority in a “muddle” over roaming rules.

Zehle refers to the dossier of case M.6497 in which Hutchison 3G Austria applied for permission to acquire One Austria (Orange) in November 2012. As part of the Commission’s approval Hutchison Austria agreed to certain commitments, notably to publish a Reference Wholesale Access Offer and host up to 16 MVNOs. So far, so good, but the interesting bit is the data pricing for wholesale access is set at €0.002 per MB. “This sets an extremely low benchmark,” said Zehle.

In order to prevent this low rate from being exploited by operators outside of Austria, clause 36 of the Reference Wholesale Access Offer states that “The MVNO shall not seek to sell MVNO services to any customer whose residence or place of business is outside Austria.”

Therein lies the rub – the EC has contradicted its vowed aim and the campaign cry of Neelie Kroes to create a single telecoms market. A consumer who lives in Austria could buy service from an Austrian MVNO, but a customer in Germany couldn’t.

Neelie Kroes will be appearing at the Broadband World Forum, taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to download a brochure for the event.

In another example, a German MVNO might wish to buy services from Hutchison Austria at these low rates to offer a seamless service that covers both Germany and Austria, a situation of very practical benefit in the single market in telecoms. But the Commission has put rules in place which prevent this from happening.

In the Digital Agenda for Europe plan, two central tenets are set out:

A telecoms single market would make a reality of two key Treaty principles:

– the freedom to provide services, so that any operator can effectively offer any customer the same high quality services, wherever in the EU;

– the freedom to consume digital services, for all citizens and businesses, wherever they originate within a ‘unified’ European telecoms space.

“I wonder what would happen if a customer of an Austrian MVNO using the Hutchison Network moved from Austria to Germany. If the MVNO does not disconnect the customer, Hutchison Austria would complain,” said Zehle.”The MVNO might then sponsor that customer to bring a test case on the grounds of single market provisions, that the MVNO does not have the right to disconnect the customer.

“Neelie Kroes has made the roaming proposals without having thought through the full impact on the mobile industry.  This deserves much greater consultation,” he said.

Kroes’ team had not responded to calls for comment at the time of publishing.

One comment

  1. Avatar Pal Zarandy 02/08/2013 @ 10:33 am

    According to the latest WiFi offload study, published by EC DG CNECT yesterday, the cost of transferring 18,000 incremental Petabytes in 5 years in Germany’s mobile networks would cost 15-20 billion incremental EURs to the mobile operators. That translates to about €0.001 per MB.

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